Arcade machines have evolved significantly with the integration of augmented reality (AR) overlays, creating a seamless blend of physical and digital gaming experiences. By using cameras, sensors, and projection systems, these machines overlay digital elements—such as characters, effects, or interactive objects—onto the real-world gameplay environment. Players interact with both physical controls and virtual enhancements, making the experience more dynamic and engaging.

Modern AR-enabled arcade machines often rely on motion tracking and depth-sensing technology to align virtual overlays with players' movements. For example, a fighting game might project virtual opponents onto the screen, reacting in real-time to the player's actions. Similarly, racing games can overlay digital tracks or obstacles onto a physical steering wheel setup.

This innovation not only revitalizes classic arcade gaming but also attracts new audiences by offering visually stunning and interactive experiences. As AR technology advances, arcade machines will continue to push the boundaries of immersive entertainment.